The Economic Benefits of Nonprofits

Michigan’s Nonprofit Sector

By most measures, Michigan is in the middle of an economic turnaround, following an exceptionally severe economic downturn in the early 2000s caused by a combination of Michigan’s lost decade and the national Great Recession. Nonprofits have both contributed to and benefited from this comeback, playing an integral role as the state settles into the economy of the twenty-first century. The nonprofit sector represents an often-overlooked driver of economic activity, not only as large employers, but also as contributors to the health, education, and equity of the state. It is important to understand these contributions and how they will continue to drive Michigan’s growth.

The number of nonprofit entities rose to a record high of more than 50,000 after nearly a decade of decline. Nearly all of this growth has been driven by charitable nonprofit 501(c)3s, which now number just over 39,000 in Michigan.

Nonprofits employed nearly 470,000 people in the third quarter of 2018. This number represents just over one in ten of Michigan’s total nonfarm jobs and is larger than Michigan’s leisure and hospitality industry.

In 2018, Michigan’s nonprofits held more than $268 billion in assets, an increase of approximately 13 percent from $234 billion in 2013 (adjusted for inflation). This growth is equivalent to adding an organization the size of a major automotive company to Michigan’s nonprofit sector. Notably, the assets of charitable nonprofits specifically make up 44 percent of these assets.

Revenues rose more than 17 percent, from $75 billion (2013) to more than $87 billion (2018), adjusted for inflation.

These and other datapoints show that Michigan’s nonprofit sector has stabilized following the tumult of the recession and is now demonstrating growth. More importantly, the nonprofit sector has helped fuel Michigan’s turnaround by adding wages and sustaining jobs.

Ensuring the health and growth of Michigan’s nonprofit sector will serve to further anchor Michigan’s communities, further the health and education of Michigan’s citizens, and drive Michigan’s economy.